Who pays for tariffs?

marketplace podcast is supported by YubiCo, makers of the YubiKey.

Protecting the personal and business applications and accounts that people and companies rely on every day, the YubiKey stops AI-powered cyber attacks, online identity scams, fraud, and account takeovers.

It provides powerful protection, and it's easy to use.

Simply tap your YubiKey to log in securely to everything, from email to finance to productivity applications across all of your devices.

UbiKey, still undefeated, the original passkey.

More at ubiquo.com.

Some say Odo business management software is like fertilizer for businesses because the simple, efficient software promotes growth.

Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable.

And some describe Odo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite.

So Odoo is fertilizer, magic beanstock building blocks for business.

Odo, exactly what businesses need.

Sign up at odoo.com.

That's odoo.com.

Are tariffs starting to bite yet?

We'll find out more this week from American Public Media.

This is Marketplace.

In Baltimore, I'm Amy Scott in for Kai Rizdahl.

It's Monday, the 14th of July.

Good to have you with us.

President Trump said today he's open to negotiations with the European Union after announcing a 30% tariff on EU imports over the weekend.

It was the latest in a flurry of new tariffs the Trump administration has announced, now set to kick in August 1st.

The big question since all the back and forth on tariffs began back in April has been, what will it all mean for inflation?

Tomorrow we'll get the latest read with the consumer price index for June, followed by the producer price index on Wednesday.

Marketplace's Samantha Fields checked in with a few economists to see what they'll be watching for.

I don't think you'll be surprised by the big question on every economist's mind.

Are we going to see in the inflation report tomorrow signs that tariffs are starting to show up?

Kevin Jakes, a former financial economist at the Treasury Department, says analysts have been watching for any rise in consumer prices for the last few months.

U.S.

firms have done a really good job so far of absorbing some of that.

Many companies stockpiled inventory to avoid raising prices for as long as they can.

But Jake says there are things you can't really stockpile, like food, and he'll be looking to see whether the cost of imported fruits and vegetables is creeping up.

Jed Kolko at the Peterson Institute for International Economics will be looking more closely at the prices of core goods, things like cars, computers, dishwashers, and clothes.

Physical goods, aside from food and energy, because that's where we would expect price effects from tariffs to show up most strongly.

Still, Alan Dettmeister at UBS says we might not see much increase in prices for another month or maybe a couple.

Really, by the September CPI that is released in October, if we haven't seen it yet at that point, that would be a pretty big surprise.

But he says if we do see a jump in the June numbers, take it with a grain of salt.

You never want to pay too much attention to any one-month change in basically any of the macro data.

Unless all of it, CPI, PCE, private data, starts moving in the same direction all at once.

I'm Samantha Fields for Marketplace.

It's earnings week for the big banks.

Starting tomorrow, we'll hear from JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, and Morgan Stanley.

Because banks touch so many parts of this economy, their quarterly reports can be a kind of barometer.

Daniel Ackerman has a preview.

Things are looking pretty good for the big banks, says Gerald Cohen of UNC's Keenan Flagler School of Business.

Overall, you're seeing growing loan demand, a growing deposit base.

And as for all the tariff-induced chaos in recent months, turns out that's good for big banks too, says Myra Rodriguez-Valladares, managing principal of MRV Associates.

Because they have huge trading desks.

So they can actually really profit from all the volatile movements in the stock market and the bond market.

And when banks issue their forward guidance in the next few days, they'll be looking ahead into a different business environment, says Kenneth Leon, research director at CFRA, namely a much more friendly, less regulatory framework.

For instance, the Trump administration wants to loosen the so-called supplementary leverage ratio.

That's a rule put in after the 2008 financial crisis, which limits how much big banks can use debt to fund their investments.

Loosening it would give the banks more capital to use in the business, particularly lending.

That could increase bank earnings in the near term.

Adnat Admahi is a professor of finance at Stanford.

Oh, there are huge rewards for them.

The risk is to the rest of us.

Admahi says if banks put too much money into risky assets like crypto, it could backfire.

And when the big big banks get into trouble, Admadi says, so does everyone else.

I'm Daniel Ackerman for Marketplace.

On Wall Street today, no signs of trouble.

We'll have the details when we do the numbers.

Ever since the president's so-called Liberation Day in early April, businesses all over the country have been trying to figure out how to deal with the added cost of the Trump administration's tariffs.

Some of them are simply passing the import tax on to their customers in the form of higher prices.

Others are absorbing the costs themselves, and a lot of them are mixing both approaches.

Wherever a business lands evolve some haggling along every step of the supply chain, Marketplace's Justin Ho reports.

A few weeks ago, Ken Gidden went to a trade show to order some suits to sell in spring of 2026 at the men's clothing stores he runs in New York called Rothman's.

When he was there, he met with an importer that's supplying some of Gidden's merchandise for this fall from Italy.

And the guy said, oh, by the way, the fall stuff is 5% more.

Gidden says he booked these suits months ago and already agreed on a price.

So the debate is, you know, do we stick to an agreed upon price that we agreed upon six months ago, or do we consent to the higher prices that were added on because of the tariffs?

Gidden says he really doesn't want to have to pay those higher prices.

He doesn't want to have to charge his customers more, and he's not sure whether that 5% bump is fair since he doesn't know how much his supplier is paying for those suits or in tariffs.

And so the negotiations are intricate because we don't really know the other side's position.

And that makes it complicated and sometimes contentious.

And if Gidden can't bargain down that tariff charge, we might walk away.

And hopefully it won't be a permanent end, but you know, it'll be a season we'll take off with these guys.

It's not easy being on either side of these negotiations.

I think I had a solid week where it was every client that I dealt with was very upset.

That's Catherine Reynolds.

She handles imports for Palmetto Tile Distributors in Columbia, South Carolina.

She says many of the suppliers of the tile she orders for her clients have been making her pay tariff surcharges, and she says she has no choice but to pass those along.

We can't absorb the difference there.

That's not sustainable.

So we've got to maintain our margins as well because we know what it costs to run the business.

Reynolds says she started baking the cost of tariffs into her base prices.

And then they don't see that separate line item and it doesn't feel like a slap in the face, so to speak, or like they're being nickeled and dimed.

And she says so far, that has gone over a lot better than hitting customers with a separate tariff charge.

But it's just for some reason, when they see that T-word, it just kind of sets them off a little bit.

Other businesses are taking the opposite approach and embracing tariffs in their negotiations with customers.

You got to use the word tariffs, and then you can put surcharge after it.

But if you don't have the word tariffs, you're going to have a really hard time getting any more money from anybody.

That's Richard Leo, the owner and CEO of a Norman Wright Mechanical Equipment Company, which sells HVAC equipment to contractors.

Leo says his strategy is to be as transparent about tariffs as possible, because at this point, he says his customers should expect them.

What we're saying is, hey, just turn on any TV station.

You're seeing it.

It's not something we're making up, the manufacturer's making up.

It's real.

But Leo's company is selective about passing along the cost of tariffs.

It only does it when they're really steep, think 20 or 30%.

Otherwise, he'll likely just eat the cost.

And say, look, we're just going to take care of it, but moving forward, we're going to have to charge you for it.

So it really depends on the relationship we have with the customer, how much they buy from us.

And Leo says if it's a good customer, a dispute over tariffs just isn't worth it.

I'm Justin Ho for Marketplace.

Housing discrimination isn't just history.

In some neighborhoods, it's still written into the paperwork.

Many of the deeds that transfer when a property sells still include restrictive covenants aimed at preventing sales to certain groups based on race, ethnicity, or religion.

Language that was ruled illegal decades ago, but never removed.

Groups of volunteers here in Maryland have been trying to change that, one deed at a time.

John Morgan wrote about the effort in the Baltimore Banner.

John, welcome to the program.

Hi.

John, what are these housing covenants and why do they exist?

Well, these are restrictions that were put in place in homes starting in really the 1800s, but became very popular in the 20s until they were rendered essentially unenforceable in the 1950s.

But as the country was growing and communities were adding new homes and suburbs were being invented,

many people decided it would be best if they were all white.

So there were a series of steps taken to ensure that with the encouragement of the Board of Realtors, which was new then, a predecessor to the Board of Realtors, in 1924 they created some model of covenants that could be added to home deeds in communities as they were being constructed that would explicitly deny the ability of blacks or in some cases Asians, in some cases other racial groups to buy these homes.

Aaron Powell, and not only did the federal government allow this, it actually encouraged it before the Fair Housing Act of 1968?

Yes,

it certainly did.

It was a requirement to get an FHA loan, which is what was used to develop a lot of our suburbs today.

So the federal government was very much part and parcel of this movement.

Aaron Powell,

how would a homeowner go about finding out, first of all, if this language exists in their deed or in an older version of the deed of the house and how to get rid of it?

You can go through the digital records of your own deed online.

And in Maryland, it's a state office that compiles these.

And you create an account, you go through, and you have to go back over each of the transactions that's taken place.

In the case of my house, which was built in 1926, it's been bought and sold several times.

So I finally got back to the last one, or the first one in 1926.

And it was very stark language there.

It really sort of takes your breath away.

Well, what did it say?

Well, it was written in very neat cursive in 1926.

And it said that I can't distill alcoholic beverages in my house.

Any structure has to be so many feet from a road.

And I cannot sell or rent to anyone of Negro extraction.

A lot of these contained a proviso that said you could have a black person living there, but only if they were a servant for a white owner.

And it's so matter of fact when you see this language written out that it just, like I said, it takes your breath away.

Yeah.

So Maryland passed a law recently to try to make it easier to remove this language or to strike it from covenants.

How does that work?

And is there a similar effort in other states?

Yeah, the movement started in about 2017 or so at the University of Minnesota where a researcher, Kirsten Delagrad,

was doing research on housing discrimination and decided to go out and map all the covenants in and around Minneapolis.

And they found an enormous amount of them.

And they published those online.

And a state lawmaker there in Minnesota saw this and recognized that his own home living in one of these communities.

So he passed a law, passed, I believe, unanimously, in the Minnesota State House.

And since then, 22 states, including Maryland, have passed laws that make it easier to amend your deed,

and it streamlines the process.

So in Maryland, there's a form online that you can print out.

You find your deed, you draw a line through the offensive language, and then you fill out this form and you send it into your county attorney's office, and then it gets filed with the recorder of deeds.

And the researchers are careful to point out it doesn't eliminate this history.

It will remain there, but it voids it permanently because there's been complaints that we're just trying to erase history.

Well, how do advocates respond?

I mean, even if this language is not legal, it's not enforceable, it's not actually limiting the sale of a home to anyone,

why does it matter that that language is there?

Well, they think it sends a powerful message to future generations and to current homeowners.

One of the organizers I spoke to said, we need to understand our privilege, and part of understanding our privilege that we enjoy is understanding how it came about.

And on a practical level, Supreme Court precedents can be overturned, legislation can change.

So, this assures that these covenants will never be enforceable again.

John Morgan wrote about racial covenants in deeds for the Baltimore Banner.

Thank you so much.

Thanks, Amy.

Coming up.

Bodies are aching a little bit, but that's understandable being 60.

The age of work in the UK.

But first, let's do the numbers.

The Dow Jones Industrial Average rose 88 points, 2 tenths percent, to close at 44,459.

The NASDAQ stretched 54 points, 3 tenths percent, to finish at 20,640.

And the SP 500 gained 8 points, a tenth of a percent, and at 6,268.

Let's check on some of the banks Dan Ackerman was telling us about.

JP Morgan Chase climbed 6 tenths percent.

Citigroup added 9 tenths percent.

Wells Fargo bumped up 1%.

Golden Sachs lifted 1 and 2 tenths percent.

Morgan Stanley was up 1 and 2 tenths percent.

You are listening to Marketplace.

We thought about calling it the ultimate do-everything wonder tool for making CIOs look like mad geniuses, but that sounded kind of long.

So we just call it the Enterprise Browser.

It drives productivity up, IT costs down, and helps you stay more secure than ever.

It's like the ultimate do-everything wonder tool for making CIOs look like mad geniuses.

You get the idea: the Enterprise Browser from Island.

Get yourself ready for a trip through McDonald's

Order the McDonald Land meal today and get the Mount McDonald Land shake with your very own character souvenir kit.

At Capella University, learning the right skills could make a difference.

That's why our business programs teach you relevant skills you can take from the course room to the workplace.

A different future is closer than you think with Capella University.

Learn more at capella.edu.

And now, a next level moment from ATT Business.

Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day.

You've got ATT 5G, so you're fully confident, but the vendor isn't responding.

And International Sleep Day is tomorrow.

Luckily, ATT 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you.

AT ⁇ T 5G requires a compatible plan and device.

Coverage not available everywhere.

Learn more at ATT.com slash 5G network.

This is Marketplace.

I'm Amy Scott.

People have been worrying about U.S.

debt basically ever since there was a U.S.

Back in 1787.

Thomas Jefferson even wrote, the accumulation of debts is a most fearful evil.

At the time, the national debt was around $40 million.

Today, it's closing in on $40 trillion.

And the GOP spending bill, recently signed into law by President Donald Trump, will add another $2.4 trillion in the next decade, according to the Congressional Budget Office.

At the same time, the U.S.

economy is bigger and more powerful than Jefferson could have imagined.

So, how worried should we be?

Stacey Vanick-Smith takes a look at what happens if we just ignore the debt and move on.

The national debt.

It has been the subject of scary headlines, congressional battles, dire economic predictions forever.

But right now, the U.S.

debt is at a record high, and the economy is looking pretty good.

Unemployment is near record lows.

Inflation is under control.

So

what's the problem?

Part of the problem, it's been this kind of boy who cries wolf type thing, and then people just got tired of it.

Kent Smeters is an economist at Wharton who has been crying wolf about the debt for years.

And he wondered, what exactly happens if the U.S.

just doesn't deal with its debt?

He got a few economists and mathematicians together to build a computer model of the economy to play out scenarios.

So this model is

life cycle overlapping generations model.

It's kind of the workhorse model in the field of public macroeconomics.

To map out the entire U.S.

economy across decades, though, they were going to need a bigger workhorse.

This math problem was a big one, and the model computations are about 20,000 times bigger than our standard model.

Big math energy, which needed big computing energy.

So Smeters borrowed some from Amazon and NASA, and then he and his colleagues fed the entire U.S.

economy and all of its complicated glory into the mega model.

Their economic models crashed when trying to project out the economy over the long term.

Jessica Riedel is an economist with the Manhattan Institute who studies the budget.

We cannot even model out a functioning long-term economy under current debt projections.

The crash itself, not super cinematic, says Smeters.

No flashing red letters, no skull and crossbones, no lightning bolts.

Just a few words.

Words that make a macroeconomist's blood run cold.

Model not converging.

Model not converging.

The model is trying to find what's called this fixed point where everything just adds up.

Everything's consistent and it's not able to do that.

In other words, if the debt keeps rising at its current rate and we just do not deal with it, even thousands of NASA and Amazon computers all working together cannot get the math to math.

Really, it's a question of how far we can go before the bond market says, I just don't believe that you're going to pay us back.

Bonds are like little loans, and the U.S.

government sells billions of dollars worth of bonds every week.

The interest rate it pays on those loans, super low, because people know the U.S.

is good for the money.

I will use The Simpsons to explain.

If this were Springfield, the U.S.

would be like Mr.

Burns taking out a loan.

The bank would give him a really good interest rate.

Excellent.

He's rich, he's got a great job, he's got a big house.

The bank is not going to lose its money.

Homer Simpson, on the other hand, maybe has some credit card debt, kind of modest income, some impulse control issues.

Go nuts.

The bank would probably charge him a much higher interest rate for the same loan.

Don't!

Economist Jessica Riedel says the U.S.

might be entering its Homer-Simpson era.

The country's got so much debt, and it's outpaced what the economy earns.

The debt is projected to go from 30 trillion to 200 trillion over the next 30 years.

Yes, you heard that right.

From 30 trillion to 200 trillion.

That will cause interest rates to rise.

Within a decade, interest is going to be one-third of all your taxes.

And in a couple decades, interest could be 80% of your taxes.

That is when the debt hits the fan.

If most of the country's money is going to paying interest on the debt, it can't be invested into growing the economy or filling potholes or improving schools.

It's just going to pay interest.

That is when an economy starts to shrink.

Services shut down, things stop working, businesses stop growing, start laying people off.

So how long do we have before this happens?

According to Kent Smeters' model, it'd be roughly about 20 years.

20 years until the math stops mathing.

The good news is we can actually make decisions now today that actually would stabilize the amount of debt relative to the size of the economy.

Smeters and his colleagues published a list of reforms that could help fix the budget.

Among them, raise the retirement age to 70, add a carbon tax, reduce Social Security benefits.

The chances of the government doing all that?

I'm not for the politics, but I'll give it 5%.

Okay, so not great, but still better than the odds of our current path working out, says Smeters, which is 0%.

In New York, I'm Stacey Bannock-Smith for Marketplace.

Kai is out of town, as you might have guessed.

He and ADP chief economist Neela Richardson are in London reporting the latest installments of our series, The Age of Work.

The U.S.

workforce, as we've been telling you, is getting older.

Something like 4 million people are hitting retirement age every year now.

That phrase, demographics is destiny, is a real thing, and it's going to have enormous economic implications in a lot of places.

The team in London sent us this snapshot of a worker not quite ready to wind down.

My name is Max Wallace and I'm the director, founder and principal instructor of Health Defense CIC.

I'm a former professional boxer.

Health Defense CIC was set up because I believed I could make the community healthy

mentally, physically and spiritually through boxing and doing the boxing fitness.

And it's not all about going forward with aggression, punching away.

It's about movement, it's about thinking, is to know when to react and when not to react.

A few more clients have come in, but I still need more to

basically

make it

financially advisable, if it's not the right word.

Yeah,

I didn't set this up to be a millionaire or anything, but yeah, I do need my income

to be better.

I get by by sort of

try to save as much as I can, then then I pay off certain things,

then I save a bit more, then I pay off other things.

I'm just

about keeping my head above water.

Hopefully, it will become better.

I'm speaking to a couple of people at the moment, people that can offer me grants on certain projects that I will be doing.

Yeah, I'm following that lead at the moment.

Yeah, I don't feel 60.

Body's aching a little bit, but that's understandable being 60.

I've invested

not only my life,

my funds, my savings.

I even

cancelled a pension scheme.

It means everything to me.

Max Wallace, Health Defense CIC in London is his company.

Kai and Nila are live from London tomorrow with lessons of the aging labor force there and how they might help us here.

This final note on the way out today, the Port of Los Angeles reported its busiest June ever as importers rushed to beat potential higher tariffs later this year.

The increase followed a slump in May when President Trump's 145 percent tariffs on Chinese goods slowed imports.

Those tariffs were then cut to 45 percent as part of a truce that expires in mid-August.

The port's executive director, Gene Soroka, said the June surge highlights the tariff whipsaw effect from U.S.

trade policy.

Amir Babawi, Caitlin Esch, John Gordon, Noya Carr, Amanda Peacher, and Stephanie Seek are the Marketplace editing staff.

Kelly Silvera is the news director, and I'm Amy Scott.

We'll see you tomorrow.

This is APM.

Summer's here, and it's time for your kids to have fun in the sun, but it's also a great time to nurture growing minds.

Million Bazillion, a podcast from Marketplace, teaches your kids about something that impacts all of us: money.

From a fun explainer on tariffs, yes, it's possible, to why some athletes make so much money, Million Bazillion tackles big questions with easy-to-understand answers.

Listen to Million Bazillion all summer long, available wherever you get your podcasts.